About Investment Advisors and Brokers: the Fox and the Crow
We all know Aesop's story of 'The Fox and the Crow'. The main objective of the fox in the story is to grab the piece of cheese from the crow who is holding it in her beak on the limb of a tree overhead. No matter how much the fox hates the crow in it's mind, the fox proclaims the crow as an exquisite beauty and says her voice is as lovely as her beauty. The crow was fawned by all his talks and opens her beak to sing a song but alas, the cheese drops on the ground. The greedy fox delightedly grabs it. This story gives us a fantastic lesson that we should never trust the advice of people around us, especially when they are offering us advices.
When it comes to 'Investing', like perhaps in company stock, corporate bonds
, index funds
, or mutual funds
, investment advisors and brokers approach us. They pretend to offer their best advice to multiply our investments like magic. However, it comes at a cost. We need to pay a handsome fee in return for the advice. After falling in their trap, the majority of investors don't see their investments grow to the expectations and repent on their decisions after a pretty long wait. Advisors and brokers work for earning their commissions and keep looking for crows who have cheese in their beak. When we find ourselves being a normal investor, we are an easy crow for them.
When we earn money using our talents, why should we hand it over so easily to them for investing per their choice? We need to become cupid investors
. Because when investment decisions are outsourced, the growth will be average at most.
Well known rich people in the world like Warren Buffet have become rich by their own instinct and self-developed strategies. Buffet's investment portfolio includes stocks, real estate and renewable energy. His prolonged success is hidden in 'Value Investing', a term he learned during his school days. He started his investments at an early age and is continuously following it meticulously to have become the richest investor in the world.
Cupid investing is keeping away the brokers and advisors. Establish your own strategies and take your own investment decisions, be it in the stock market, real estate or venture capital. Start investing at an early stage even from childhood. It gives a tremendous advantage of the power of compounding of returns. The stock market is a very volatile place which is a risky destination! The higher the risk, the higher the returns can be (or the opposite) is the mantra (principle) of the stock market. When investments are done we must consider well known factors viz., be patient, keep checking on emotions, wait for opportunities, grab them continuously, diversify the investments in focused stocks, book profits and reinvest it in newer investment avenues.
Managing investments is like growing and raising children. It needs care and attention throughout. It has a long-term horizon. If we handover the charge to someone else, the results are at most average, but probably disastrous. A cupid investing approach is the better option when we want to see our investments grow healthy and wealthy.